While planners and social engineers push for higher housing densities, surveys show most Millennials want the home they buy to be a detached single-family dwelling in the suburbs. This is important because the Millennial generation is now the largest living generation in the country and comprises the largest segment of home buyers.
The National Assn. of Realtors notes that a growing share of home buyers belong to the Millennial generation. Most are buying single-family homes outside of urban areas, according to an annual survey, 2016 Home Buyer and Seller Generational Trends.
At the same time, economic pressures are making it tough for Millennials to buy. Crippling student debt, flat wages and rising home prices stand in the way of saving for a down payment.
The Pew Research Center citied U.S. Census Bureau 2015 population estimates released recently. Millennials (ages 18-34) numbered 75.4 million last July, nudging Baby Boomers (ages 51-69) out of top spot. The Millennial population is projected to peak in 2036 at 81.1 million, pushed upward in part by immigrants in that age group.
Millennials represented 35% of all home buyers in 2015, up from 32% in 2014. The share of Millennials buying in an urban or central city area declined to 17% from 21% a year ago. Multifamily home purchases dropped to 10%, from 15% the year before.
Is it price or desire that makes suburban living attractive? Both, apparently. “While Millennials may choose to live in an urban area as renters, the survey reveals that most aren’t staying once they’re ready to buy,” said NAR chief economist Lawrence Yun.
“The median age of a Millennial home buyer is 30, which typically is the time of life where one settles down to marry and raise a family. Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search farther out,” Yun declared.
Even so, Millennial buyers are strongly influenced by neighborhood quality (63%) and convenience to jobs (60%).
“Limited inventory in Millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households,” he continued. The median income of Millennial home buyers in this year’s survey is $77,400. Student debt, cited by 53% of respondents, is the main reason Millennials delay saving for a down payment.
State regulators and municipal legislative bodies accept as an article of faith that population density in cities must increase. When redevelopment in Bend goes vertical, will dwelling units in multi-family buildings meet the expectations of Millennial generation buyers? Or will the suburban lifestyle paradigm remain an irresistible element of our collective experience? Time will tell.